Sino-US film quotas enter the second round of negotiations, imported films will have a lot to watch in the future

This year, have you seen Resident Evil 6, La Land or Wolverine 3? Next, will you have any expectations for "King Kong: Skull Island","Speed and Furious 8" or "Terminator 2"? Imported blockbusters were released one after another, igniting the audience's enthusiasm for watching movies.

This year, have you seen "Resident Evil 6","La La Land" or "Wolverine 3"? Next, will you have any expectations for "King Kong: Skull Island","Speed and Furious 8" or "Terminator 2"? Imported blockbusters were released one after another, igniting the audience's enthusiasm for watching movies.

"If nothing goes wrong, the box office in April is expected to significantly exceed the level of the same period last year, and the contribution of imported films will be indispensable." Yin Pei, an analyst at China International Capital Corporation Securities, told reporters that in 2017, the three major factors of improving film source quality, sinking cinema channels and proactive marketing strategies (ticket compensation, etc.) can continue to be realized, which is expected to promote a relatively strong year in 2017. The growth in box office data exceeded the market's growth forecast of 15%. Among them, imported films alone are expected to bring an incremental box office of nearly 8.9 billion yuan, corresponding to a year-on-year box office growth rate of 19.5%.

Box office growth in April is expected

to end on March 19, with China films earning 2.12 billion yuan in March. According to Yin Pei's calculations, the box office in March is expected to reach 3.7 billion yuan, basically the same as last year. "Considering the high base effect last year, this achievement has exceeded market expectations." In his view, one of the reasons for the good box office performance in March was the strong release of seven imported films. Among them,"Wolverine 3" is the curtain call performance of starring Hugh Jackman as "Wolverine", with box office exceeding 330 million yuan in the first three days;"A Dog's Mission" focuses on the family card of humans and dogs, and the director once directed "The Story of the Loyal Dog Eight Gong", which has a high reputation in Douban;"Beauty and the Beast","Lego Batman Movie","Final Fantasy 15: Sword of the King" and "The Genius Catcher" also have strong IP support;"King Kong: Skull Island "has a lineup of stars such as Tom Hiddleston, Bree Larson, and Jing Tian. It focuses on special effects and action scenes. Although it has not been released, it has already aroused expectations.

In Yin Pei's view, entering April, the box office market will be more interesting. First of all, the quality of imported films far exceeds that of the same period last year. No classic overseas films were released in April last year, and the box office performance was flat. No films with a box office of more than 1 billion yuan appeared. There were only three films with a box office of more than 100 million yuan, namely,"Fantasy Forest","The Fall of London" and "The God Hunter: The Battle of Winter". Looking back in 2017, the blockbuster masterpieces "Speed and Furious 8" and "Terminator 2" were both scheduled for release in April. Given that "Speed and Furious 7" once generated a super high box office of 2.427 billion yuan, and "Terminator: Genesis" also grossed 725 million yuan, the two sequels are expected to box office well. Secondly, the quality of domestic films has also improved significantly. "Suspect X's Dedication" is a remake of a classic overseas IP work. Although it will be released on March 31, most of the box office will be realized in April;"Master of Memory" is starred by Huang Bo, Xu Jinglei and Duan Yihong, and is a suspense drama produced by Wanda Films and Television, and its high acting skills have become a strong guarantee for the box office;"Spring Jiao Saves Zhiming", as a follow-up to "Spring Jiao and Zhiming", will recreate classic love. In addition, actors such as Jin Chengwu, Andy Lau, and Fan Wei have their works released. "Not surprisingly, the box office in April is expected to significantly exceed the level of the same period last year, and the contribution of imported films will be indispensable." Yin Pei said.

Not only in April, imported films will even drive box office growth throughout the year. According to estimates, the box office of imported films in the first two months of 2015 and 2016 accounted for 12.27% and 13.4% of the total box office of imported films that year respectively, and the proportion remained stable at around 13%. "The total box office of imported films in the first two months of 2017 was 3.63 billion yuan, a year-on-year increase of 42.3%. Assuming that imported films accounted for 13% of the annual box office of imported films in the first two months of 2017, the annual box office of imported films will be approximately 27.9 billion yuan, an increase of 8.86 billion yuan over the same period last year." Yin Pei said that in other words, the increase in the box office of imported films alone can drive a year-on-year box office growth rate of approximately 19.5% for the whole year.

The probability of expanding the capacity of imported films is

the increase in the box office of imported films, which is closely related to the improvement of their quality. In fact, from the perspective of film supply, the quality of overseas films in 2017 was better than that in 2016. Imported films with box office of more than 500 million yuan last year included only six films: "Warcraft"(1.472 billion yuan),"Captain America 3"(1.246 billion yuan),"X-Men: Apocalypse"(803 million yuan),"The Incredible Pirates 2"(639 million yuan),"Angry Birds"(514 million yuan), and "Independence Day: A Return"(503 million yuan). This year, there are as many as 8 classic films alone.

Imported films have made a lot of money in the China market, which has also attracted more attention to the ongoing import film quota negotiations. In 2012, China and the United States signed a "Memorandum of Understanding" on resolving WTO film-related issues, which is valid for five years. On February 17, 2017, the two sides began the second round of negotiations. The most concerned negotiation content was the number of American films introduced and the change in the box office share ratio between China and the United States.

In this regard, Yin Pei believes that increasing the quota for imported films is a high probability event. According to the "Memorandum of Understanding", China introduces 34 sub-accounts each year. Now, after five years of rapid development, China's film market has a better foundation for cooperation. "From the perspective of demand, the increasingly rich spiritual and cultural needs of the audience and the gradually opening international vision determine the huge market space for imported films; from a policy perspective, 2016 is the 15th year of China's accession to the World Trade Organization, and international rules have put forward higher requirements for the opening up of China's cultural industry; From the perspective of the market environment, with the increasingly improved copyright protection rules, the cost for viewers to obtain film resources from the Internet is becoming higher and higher, and imported films can be released almost simultaneously with overseas markets, which allows more potential movie-watching groups to enter the movie theater." According to Yin Pei.

In addition to the negotiation of import quotas, the adjustment of the share ratio between China and the United States is more sensitive. In Inpei's view, considering that in recent years, China's box office market has become Hollywood's largest single ticket warehouse outside the country, China undoubtedly occupies a favorable position in the negotiations. At the same time, the rise of the quality of domestic films has also greatly reduced the China market's dependence on overseas films. In 2015 and 2016, domestic films accounted for about 60% of the box office. In the first two months of 2017, the box office of domestic films exceeded 7 billion yuan, accounting for nearly 70%.

Listed companies have benefited a lot.

The increase in imported films and the growth of box office will boost the performance of listed companies at the distribution, investment and screening ends.

China Film Company and Huaxia Film Company are responsible for the distribution of overseas imported films in my country. According to calculations by China International Capital Corporation, without considering quota increases this year, imported films are expected to drive a year-on-year box office increase of 8.86 billion yuan. Assuming that China film companies can receive 50% of the incremental box office revenue, imported films this year are expected to contribute about 200 million yuan in distribution gross profit to China film companies. In the future, assuming that the distribution rights of imported films are gradually opened, more potential beneficiaries will emerge.

In addition to China Film Company and Huaxia Film Company, private film and television companies can also participate in the distribution and screening of overseas films in China through film approval (that is, domestic companies buy out the screening rights of imported films in mainland China, and overseas distributors and producers do not participate in the share of mainland films). Among them,"Your Name." Both "Resident Evil 6" and "La La Land" adopt the method of batch distribution, which is characterized by high risk and high yield. Successful batches often bring huge profit elasticity to enterprises. Yin Pei introduced: "" Your Name "introduced through Light Media. For example, it is estimated that after deducting the one-time buyout price and publicity expenses, its box office share and net profit from new media copyright sales will be more than 100 million yuan."

Yin Pei introduced that in addition to distribution, relevant companies can also obtain box office split rights for imported films through investment. For example, Perfect World and Huahua Media have established long-term cooperative relationships based on film share investment with Universal Pictures and Paramount respectively. At the same time, the explosion in the box office of imported films will directly increase the revenue of theaters at the screening end, especially theaters that are positioned at high-end and can attract passenger flow through imported films.

Editor: yvette